The Legal-Tender Act

September 1, 1868

Summary

Explains how the Legal-Tender Act was decided to be unconstitutional by the courts.The Act had originally outlawed the use of gold and silver in paying back wartime debts. The Dispatch makes the point that they believe that this is less about unfolding thbout making it easier for states to pay back debts for the war.Before this, states would just print paper money and spend which was causing hyperinflation.However the Dispatch just views it as the radical north picking on the south again.

Transcription

The Legal-Tender Act. The Nation, the roost respectable Radical paper in the United States, is of opinion that the probable solution of the greenback controversy will be found in the decision of the Supreme Court of the United States that the legal -tender act is unconstitutional. There are eight judges, four of whom are, it says, " unquestionably allied to the Democratic " party, and two others are understood to " have leaned towards it for some time." The Nation builds its argument upon an insecure foundation. It assumes that Congress is restrained by the Constitution from passing laws impairing the obligation of contracts ; but the fact is otherwise. The language of that instrument is that " no State " shall "make anything but gold and silver coin a tender in payment of debts, or pass any law " impairing the obligation of contracts." " No State" could make greenbacks a legal tender in ' payment of debts ; but a fair inference would seem to be that Congress might do so without a violation of the Constitution ; for the same section of the Constitution goes on to say that " no State shall, without the consent " of Congress, lay any imposts, or duties on " imports or exports, except what may be " absolutely necessary for executing its " inspection laws;" and so forth, lhat section in fact names a number of things which " no State " may do, but which Con gress has always claimed, and has always been accorded, the right to do. Congress certainly has no moral right to pass any act impairing the obligation of contracts; but we imagine that the Supreme Court will hardly find in " the injustice which was " suffered by creditors in 1862 and 1863, " when debts contracted in gold were paid " off in depreciated paper," a sufficient reason for pronouncing the legal-tender act unconstitutional. Congress may debase the currency. Indeed, it once did so. A silver dollar of the present coinage has not the intrinsic value of a silver dollar of the coinage of any year previous to 1848, or whatever year the act was passed reducing the quantity of silver in a dollar. Yet no one will contend that a debt contracted previous to the passage of that act might not " constitutionally " be paid off in the silver coin of the present day. Some statesmen contend that Congress may make money out of leather if it pleases. But let all these things be as they may, there are plausible reasons, to say the least, fur holding that Congress has the right and the power under the Constitution to make greenbacks a legal tender in payment of debts. These plausible reasons are all that courts ever require to justify them in upholding the action of a legislative body that has control of the subject by right. The Supreme Court can easily satisfy its own, conscience. The least bit of constitutional law is all that it needs. Whenever a law is by that tribunal pronounced unconstitutional, it is a law which finds no sort of warrant in the Constitution- not one about which there may be two opinions as to its constitutionality. We look for no decision from that court such as the Nation expects.
About this article

Contributed By

Jacob Markman

Identifier

MarkmanJacob-18680901-thelegaltenderact.pdf

Citation

“The Legal-Tender Act,” Reconstructing Virginia, accessed November 27, 2021, https://reconstructingvirginia.richmond.edu/items/show/1106.